|
May 25, 2022
The minutes from the May meeting of the Federal Open Market Committee signal that the central bank wants to quickly hike rates aggressively at the next couple of meetings to allow officials to potentially pause to assess the effects of policy firming on the economy, inflation and financial markets. This would improve the odds that the Fed engineers a soft landing. Previously, it appeared the Fed was going to hike until something broke, either inflation or the economy. The minutes were lighter on the inflation discussion than in March. On the balance sheet, a number of officials supported eventually selling mortgage-backed securities. The immediate market reaction to the minutes was fairly tame, potentially because there were no big surprises.
|
|
May 17, 2022
The four-week moving average in our U.S. Policy Uncertainty Index fell from 379.8 to 379.1 the week ended May 13. Odds are that it will resume rising, as there is considerable uncertainty about the U.S.'s next response to the Russian invasion of Ukraine. Also, the U.S. midterm elections are approaching. Monetary policy should also rise because the Federal Reserve has essentially hit the panic button; it is aggressively raising rates and financial market conditions are tightening.
|
|
May 17, 2022
Consumers broadly are not under severe financial stress, as personal bankruptcy filings remained low in the first three months of 2022. Abundant cash and jobs continued to support household finances even as inflation accelerated. The year-over-year decline moderated, as filings atypically fell in the comparable quarter of 2021. U.S. courts reported that nonbusiness filings came in 15.9% below their year-ago level after falling 17.7% the prior quarter. On a quarter-to-quarter basis, filings rose 0.7%. Business filings inched lower in the quarter, falling 3% from the fourth quarter, hitting another post-2006 low. They were down 27.6% from a year earlier. This compares with a 36.3% drop on a year-ago basis in the prior quarter.
|
|
May 13, 2022
The Moody's Analytics & CNN Business Back-to-Normal Index inched forward this week, rising from a revised 93.6 to 93.7. Improvements have been hard to come by of late, though our expectation remains a positive one. The two biggest drags on the U.S. index recently, our business confidence measure and mortgage activity, improved this week. The remaining components were flat from the week before. Just three states—Idaho, Montana and South Dakota—currently have readings at or above 100.
|
|
May 04, 2022
The U.S. nominal trade deficit widened more than anticipated in March, highlighting the enormous drag on first-quarter GDP. The nominal trade deficit widened from $89.8 billion in February to $109.8 billion in March. The widening in the trade deficit was more than either we or the consensus anticipated. Nominal exports were up 5.6% while imports jumped 10.3%.
|
|
May 04, 2022
Trade activity increased significantly in March, though imports outgained exports, shrinking Canada's merchandise trade balance. Imports rose by 7.7%, lifted by energy and consumer goods. Exports rose 6.3% higher, mostly on contributions from energy, motor vehicles and metals. In turn, the merchandise trade surplus shrank from C$3.1 billion to C$2.5 billion. Russia's invasion of Ukraine has spooked commodity prices higher and increased demand for Canadian products.
|
|
May 03, 2022
The median price of an existing single-family home is up 15.7% from a year earlier, according to the National Association of Realtors. Prices increased in 182 of the 185 metro areas tracked by the NAR. Moreover, 70% of metro areas have double-digit price increases from a year earlier, which is up from 66% last quarter. Affordability continues to decline, with households spending nearly 19% of their income on mortgage payments, which is nearly 5 percentage points higher than a year earlier.
|
|
May 02, 2022
The U.S. economy struggled early this year because of the Omicron variant of COVID-19, while Russia's invasion of Ukraine played only a small role. Inventories were a drag while net exports were an enormous weight. Net exports were affected by strong domestic demand, supply chains, and a weaker recovery outside the U.S. Our estimate of real monthly GDP declined 1% in March following a revised 0.3% gain in February (previously -0.4%). Revisions to monthly GDP have been larger than normal recently. Our monthly GDP estimate is consistent with the government's advance estimate of first-quarter GDP, which showed it fell 1.4% at an annualized rate.
|
|
Apr 27, 2022
The U.S. homeownership rate inched down from 65.5% to 65.4% in the first quarter of 2022. On the other hand, the median asking rent for vacant rental units edged up nearly $50 to $1,255. Meanwhile, the median asking price for vacant for-sale units fell from $239,000 in the fourth quarter of 2021 to $225,500 in the first quarter of 2022. The housing and rental markets remain hot because of low supply and strong demand.
|
|
Apr 27, 2022
Inflation expectations edged higher in the week ended April 24, according to the Moody's Analytics Inflation Expectations Pulse. The benchmark 10-year IEP increased to 2.37%, up about 5 basis points over the last eight weeks.
|
|
Apr 27, 2022
Mortgage application volume took a dive this week, falling 8.3% from the week before. Sharply rising mortgage rates have caused the composite index to contract for seven consecutive weeks. The purchase index declined 7.6% while the refinance index dropped 9%. Contract rates for fixed-rate 30-year mortgages jumped 17 basis points from 5.2% to 5.37%, the highest rate in more than a decade.
|
|
Apr 18, 2022
Global business sentiment has been stuck in the doldrums since start of the year, with about one-third of responses to the survey questions being negative, one-third positive, and the remaining one-third neutral. The high share of negative responses is worrisome, as the only other times in the survey's nearly 20-year history it has been as high was during the height of the financial crisis in 2008-2009 and in the pandemic lockdowns in early 2020. Russia's invasion of Ukraine and the COVID-19 pandemic clearly continue to weigh heavily on businesses' psyche. The economic expansion is fragile, especially in Europe and North America, as Asian and Latin American businesses are somewhat more upbeat.
|
|
Apr 04, 2022
Household financial burdens rose again in the fourth quarter as growth in debt payments and obligations remained healthy while fading stimulus weighed on income growth. Burdens remain extraordinarily low by historical standards, however. The financial obligations ratio rose 17 basis points to 14%. The third quarter was revised down from 13.84% to 13.83%. The debt service ratio rose 14 basis points to 9.34% from its prior level, which was revised down from 9.21% to 9.2%. The consumer debt service ratio led the gain, with the mortgage ratio rising notably as well.
|
|
Mar 28, 2022
The advanced estimate of wholesale and retail inventories indicates a strong build in February. Wholesale inventories grew 2.1% from January to February, leaving stockpiles 19.4% higher than year-ago levels. Durable goods inventories expanded 1.7% while nondurable goods grew 2.8%. Retail inventories increased 1.1% in February from the month before.
|
|
Mar 22, 2022
Soaring energy prices, spurred higher by the escalating geopolitical conflict in Eastern Europe, propelled producer prices to their largest monthly gain in more than 42 years. The Industrial Product Price Index increased 3.1% in February compared with the prior month, leaving the measure 16.4% higher than its year-earlier level. However, the price pressure was not limited to energy, as producer costs increased across the board.
|
|
Mar 03, 2022
The Moody's Delinquency Tracker total delinquency rate increased 6 basis points to 5.3% in January. Office and retail delinquency rates edged upward and offset declines in the hotel delinquency rate. Both the subcomponents and regional scores were mixed this month.
|
|
